Your complete guide to ordinance or law coverage for your home or business

Unless your home or building is brand new, local building codes have likely changed since it was completed. If you experience damage to your home or business location, your city or state might require you to upgrade after a covered loss to structure up to code. This is why an optional ordinance or law endorsement on your home or business policy may be right for you.

Model of a home with the roof removed to see the wooden frame. Model is on top of a blueprint of a home design.

What is Ordinance or Law coverage?

Typical homeowner’s insurance is in place to cover the costs of damage to your home, your personal items, and other structures (like a shed). If a new building code was created after the construction of your home and you experience damage, you may be required to upgrade to meet those new standards.

Most insurance companies consider repair or replacement of your home’s undamaged portions an upgrade and would not be covered by the standard homeowner’s policy.

This is true for commercial business insurance as well.

The misconception is that ordinance or law coverage is just for old homes. Building codes change constantly, and unless your home is brand new, there is a significant chance local laws have changed.

Why do I need Ordinance or Law coverage on my home?

Without ordinance or law coverage, any extended replacement cost for meeting the code is not covered by standard home insurance and will come out of your pocket. With this coverage, you will also be protected if you need to tear down and replace other sections of your home for the entire structure to be brought up to code, even if they were not damaged.

There is a different ordinance or law coverage for each insurance company. Typically, this is a percentage of the dwelling limit on your home insurance policy.

We are here to help you through all your options for your home or business. Working with an independent agency gives you the flexibility of choosing the right coverage. Book an appointment with a local Northwest agent to discuss your options.

Why do I need Ordinance or Law coverage for my business?

Like your home, your business structures are subject to local ordinances or laws to comply with building codes. If your business building is damaged and the city, county, or state requires you to upgrade any portion of it to be within regulation, ordinance or law will cover you.

The key consideration is that ordinance or law coverage helps protect both the damaged and undamaged portion of your building and how likely local building codes have changed since the structure was constructed.

What are some examples?

Fire suppression. Some cities have adopted strong guidelines for reducing damage to homes and surrounding areas due to fires. This includes requiring homes to have fire sprinklers installed. If a home in one of these cities is damaged from a tree falling on the roof, the city may also require installing fire sprinklers to bring the house up to code.

Energy efficiency. More cities are updating their local building codes to make homes and businesses more environmentally friendly across the Pacific Northwest. This may include requiring homes to have new triple-pane windows. Ordinance or law coverage will help pay for the new, more expensive windows to be installed.

Electrical safety. If you live in an older duplex, condo, or apartment, you may share an electrical panel with multiple units. If a tree falls on the electrical wire coming from the street to your home or business, the city may require you to replace the circuit panel with multiple panels and re-wire the main electricity to each unit. Ordinance or law will help cover this cost.

How do I get started?

The best way to add ordinance or law endorsement onto your policy is to give your agent a call. Unfortunately, there is not a cookie-cutter choice. Depending on the area, property value, structure type, and replacement cost, your choice for ordinance or law coverage could be different.

Where do I find more information?

There are many great resources available to learn more about ordinance or law endorsements on home or business policies. Here’s a list of additional sources.

Tree falling on a light blue home